Noah “Noahpinion” Smith is one of a raft of repulsive etatist shills,i some of whom are dressed up as “comedians” and others as “economists,” whom the political left – that is, the USG and the rest of the failed welfarist nation states, those utopian “experimenters”ii – relies upon to enact its morally untenable and practically unworkable purpose of complete mentaliii and physicaliv taxation as a means of achieving global Africanisation. It’s towards this that they aim and they’ll be damned if they fail, lest, God forbid, someone, somewhere manages to improve their lot in life by the strength of their merits rather than the strength of their faults.

Sure, I’ll accept that Noah Smith isn’t the most notable of the “economist” set,v he’s no Krugman or Piketty now, which is to say that he will starve when this is all said and done, but I can’t help but think that his bespectabled head would look ever so right atop a spike on the tall walls of mine castle.vi While we’re cleaning the guillotine, let’s shag this useful idiot for all he’s worth.

Smith’s latest article for Bloomberg News is entitled The Threat Coming By Land. So for your enlightenment and entertainment, let’s dig in :

For all the alarm about the “rise of the robots,” or “software eating the world” or the peril of climate change, one of the most pressing economic dangers of the future is getting short shrift: Landlords are eating the world.

Ok, we can agree that this AI scam is vastly overblown.vii Idem “the peril of climate change.” But we most sharply and divisively part ways at Noah’s second proposition here (among others), that software isn’t eating the world. You see, before, say, 2011, when Bitcoin reached USD parity and truly (if accidentally)viii monetised, this may have been an acceptable proposition. Up to that point, it was acceptable to use Winbloze, acceptable for software libraries to be dynamic, acceptable for application updates to depricate operating systems and, in turn, computing hardware in the name of “progress.” Up to that point, anyone could code ! It was fun and cool and oh-so-in-vogue ! The birds did it, the bees did it, even educated retarded fleas did it!

But those days are over. It’s been half a decade now and software is moving in one direction and one direction only : stability and predictability, which is to say, far, far away from “the community” and their several, varied, and unpredictable mental deficiencies and towards something that is quite literally bankable : solid, trustworthy, safe as can be, and fostering historically unparalleled levels of self-reliance and personal independence.

Now as to whether landlords are eating the world, Noah has some more explaining to do :

A great report by the Economist showed that the share of residential property value as a percentage of gross domestic product has skyrocketed in European countries since 1950. This is bad for the economy. To understand why, we have to look at the reasons land has value in the first place. That’s not easy, because for most of human history, the value of land came mainly from the value of its natural productive power — the fertility of the soil, or the minerals beneath the earth. But in the modern age, land has value for a very different reason, summed up by the real estate mantra: location, location, location.

Now, I can’t say that the Economist has impressed me with its utter lack of intellectual rigour of late, but its interest in compiling statistics is our primary consideration here, and even if these numbers are inevitably tainted by the very human tendency to cherry-pick data, the analytical conclusion that residential property value as a percentage of GDP has skyrocketed in European countries since 1950 isn’t really that contentious nor that hard to explain, even if Noah’s estimation of the causes, and by extension the conclusions he draws, are quite entirely mistaken.

In essence, Noah’s “modern age” explanation for why land has value, that location matters in any way and isn’t dead as a goddam doornail and rendered materially obsolete by the Internet, is in fact exactly backwards. Exactly. That anything whatsoever has any value whatsoever because of location is a historical artifact given how much of the world has access to clean air, water, and food, and how little of human culture extant is to be found in meatspace.

The actual explanation for why property “values” have increased both relative to the greater economy and in “dollar terms” in the past 65 years is the fundamental need of the welfarist nation state to numerically demonstrate, with “facts” and everything, its indisputable superiority over any and all other forms of political and social organisation. In practice, this means the promotion of what very poor economistsix would call “the wealth effect,” which is to say, “confirmation of your investing prowess and intellectual superiority as make money while you sleep-ers,” all of which is funded by inflation-exporting FED printing pressesx and unsustainably perverted lending practices that socialise banker losses and create environments rife with moral hazard.

Naturally, this is all intended to “prove” “growth,” more and more and more, ad infinitum, because that’s what progress is and that’s why a representative democracy is the best thing since sliced bread, donchaknow. What else could progress be, you might ask ? What else indeed.

As our economies become more complex, there are more kinds of stores, more cultural activities and more industries to cluster together. Therefore, the value of location increases, which pushes up the value of land. It doesn’t matter how much empty land is out there — who wants to live on the Kansas prairie? What matters for the value of modern land is the incentive to locate close to other people. And unless we all start telecommuting and living entirely online, location will become more and more valuable as our economy becomes more complex.

What does Noah mean here when he so casually and cavalierly brushes aside the mounting trend that unravels his entire argument ? What world could he possibly see out of his mortgaged window other than one where employees are being paid 5x the local going rate for internationally telecommuting and where pretty well everyone lives online all the goddam time – the upper classes via desktops, the middle classes via laptops, and the lower classes via “smartphone” ?xi

Really, the impact of digital communication and strong encryption being both anecdotally and empirically obvious, and while we agree that the global economy – which is to say, the Internet Economy – is increasingly complex, it follows that location is becoming less and less valuable, NOT MORE AND MORE !!! This conclusion, that you’re basically underwater on your mortgage whether you know it or not, calls into serious question what passes for “economic debate” and “joining the conversation” these days. Jeez Louise you’d swear that Twitter and whatever other social media noisehole were designed exclusively to trap and hold idiots like lobsters in seafood restaurants. You’d almost swear… but who’d be so cynical !

So the increasing importance of land is bad news for the global economy. What can we do? One approach, advocated by the 19th century economist Henry George, is to tax the value of locations.

Shock of shocks ! Colour me agog and aghast !! For serial, the conclusion that Noah constructs in complete, convenient, and callous opposition to reality – which he then presents as God’s Honest Truth – leads him to the clear belief that taxes MUST be raised. Because no one saw that coming. Not from scientistic “economists” who use “data.” Mmnope. Nosireebob. Honestly, I can’t be the only one this sick and tired of the same fucking socialist playbook. By now, the poor paperback’s so weathered and worn from the millennia of doe-eyed children thumbing the same pages over and over that the paper is yellowing and the corners of the cover are rounded and peeling. So Noah – and the rest of you Soviet-Harvardites too – what say next time you bring a few new plays to the table.

If you want to be “scientific” and “experiment,” you have to actually experiment. Y’know ?

___ ___ ___

Whether they know it or not, whether they care or not, whether they want it to be otherwise or not, they support and maintain the thin veneer of relevance of the grotesque federation of states known as the USA, and in doing so, create terrorists. True story. [↩]

Shouldn’t experiments work some of the times in some of the places for some of the people ? I’m inclined to say yes, but then again, science degrees, even multiple ones, don’t really lend the credibility they used to. [↩]

Though still big enough for Taleb to call him a “bullshit vendor” on Twitter. Then again, Taleb isn’t the best at teasing out the trolls from the chaff online and as such he stoops well beneath his station far too frequently. [↩]

As evidenced by Noahthority’s blogspot homepage, he’s neither wealthy nor well connected enough – nor “lizard-like” enough – to make it through this alive. I mean, even the caption under the photo on his “Noahpinion” blog is lulzily divorced from reality, however tongue-in-cheek : “I shall save this planet, never fear.” Mhm. I’m sure you will, Captain Planet. Gonna take pollution down to zero, are ya ?

So yea, there’s pretty much no chance in hell that Noah’ll even be in ESR’s seat a decade and a half from now. More likely than not, he’ll just find himself on the wrong side of history. Just like that. Chewed up, spit out, half-digested, like three-quarter rotten roadkill. [↩]

Even if automation threatens the less broadly capable and adaptable among you. [↩]

Ie. economist with very poor understandings of either politics, history, or psychology of non-undergraduate liberal arts students. [↩]

China takes scrip to develop its manufacturing capacity and in exchange gives the US cheaper goods than it could otherwise produce itself. Not a bad deal on either end, but this arrangement only works for as long as China has cheap biodiesel (which isn’t forever), for as long as the US can consume more Chinese exports, and for as long as other countries are pricing commodities in USD and lending some semblance of value to the currency itself. [↩]

While I suppose that there are a few infants and a few white-hairs who aren’t “entirely online” and, in the case of the latter group, may never be there, but what is this “unless we all” nonsense about anyways ? Who seriously imagines that the proles either matter to any appreciable degree, can be measured with any accuracy or can even, and this is the most racialist of all, be considered a unified mass ? [↩]

18 thoughts on “Noahthority and “economists””

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rent does seem to go up, in important cities. the internet seems to increase the returns to living in the city (there r more ice cream shops in the city, and now u can find all of them!). also, firms seem to camp where they can find big assemblies of human capital to work on their projects, and human capital moves to where the firms camp, etc. the opportunity cost of hi rents that push people out of SF is probs high

in a number of economically vital mid-size cities, mortgage credit is still tight enough that buying a home to rent out has lower p/e val than SP500. maybe it’s not saying much that the market has lower expectations of some dumb rambler than some all-world companies, but demog trends suggest that townhomes rn’t closer to full commodification than iphones

I chalk this up to network effects. Followers want to be where the leaders are and the soi-dissant fiat leaders seem to aggregate in London, New York, San Fran, etc.

the internet seems to increase the returns to living in the city (there r more ice cream shops in the city, and now u can find all of them!).

“Seems,” madam? Nay, it is ; I know not “seems.” Why couldn’t you find all the ice cream shops before ? What, no yellow pages, no word of mouth ? Besides, no one wants hurr durr random ice cream, they want the best, as determined by their WoT.

the opportunity cost of hi rents that push people out of SF is probs high

The opportunity cost for the firms is perhaps high, but the opportunity cost for the would-be employees couldn’t be lower. The best thing a hopeful young coder can do is, yes, get in the #b-a WoT. San Fran doesn’t much figure into the future of the world.

in a number of economically vital mid-size cities, mortgage credit is still tight enough that buying a home to rent out has lower p/e val than SP500.

Rental property should have lower returns to capital than productive firms. So it does. And I won’t even get into what one could possibly mean by “economically vital mid-size cities” unless this Chengdu we’re talking about. Moving along.

I agree that it’s about network effects, and that it is. the phone is more portable than the yellowpages. maybe ice cream merits planning ahead

how many can the WoT admit? I tried reading the logs and found that I could not understand. I will have to stick with organic religion, skill development, btc

I know u said u wouldn’t get into “economically vital mid-size cities”, but I mean US cities with high employment rates, and high gross product and population growth. I should have said economically lively, as these cities r not as important to the economy as vital organs r to the body

I like the mortgages because no margin calls, and housing demand and supply feel relatively inelastic. I am not optimistic about forward corporate profits. otoh my long-term obligations have made greed of my fun thrift, and I know renters who live better lifestyles at my income level, who don’t have to barracks homies to feel secure about making payments in case of personal medical emergency, or something. humph

Like any other organic social hierarchy, use the Dunbar number. So figure ~150-200 per individual in a pyramid with assbot at the apex.

I know u said u wouldn’t get into “economically vital mid-size cities”, but I mean US cities with high employment rates, and high gross product and population growth.

So what, a couple cities in Texas ? Hardly the bellweathers now are they.

I like the mortgages because no margin calls, and housing demand and supply feel relatively inelastic. I am not optimistic about forward corporate profits.

“Corporate profits” is woefully generic and therefore not really meaningful. What corporations in particular are you referring to ? S&P500 companies ? If so, expand your horizons a bit. There are Bitcoin corporations too, y’know.

I know renters who live better lifestyles at my income level

There’s something to this. Not only are renters more flexible in terms of their costs to seize new opportunities, but they aren’t making 20-30 wagers on interest rates staying at historically low and therefore unsustainable levels. Plus, home “owners” tend to underestimate the true costs of ownership, particularly maintenance. It’s little wonder that renters come out ahead of property “owners,” barring insane capital appreciations like we’ve seen in the last generation – a bubble that cannot reasonably be expected to inflate another 30x or whatever in the next 30 years as it did in the last.

And if you’re renting out your place, without significant capital appreciation, the returns to capital on are pretty abysmal too. You can’t expect much better than 2-3%. So you’re basically losing to inflation while tying up significant capital and buying yourself a job. Why bother.

I’m not sure y the cities would have to b bellwethers for homes within them to pay good returns, and I hardly think we have to scour Texas to find growing cities where rent is rising faster than has been typical for a lifetime

I am pessimistic about forward corporate returns, in general. I agree that the situation is woeful. I’m not smart enough to understand any of the bitcoin businesses that I’ve studied, and I’m usually too chicken for the ground floor

I sometimes regret the buys, and I anticipate selling well before maturity, to lock in gains and see more of the world

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